Mid-Morning Look

Monday, October 06, 2025

U.S. stocks start the week off higher, with the S&P 500 looking for another record high and its 7^th straight day of gains while Nasdaq rebounds after a modest loss Friday, boosted by semiconductors behind AMD (shares +27%) announced a deal with OpenAI to roll out AI infrastructure in a pact that they said could generate tens of billions of dollars in new revenue, as OpenAI is taking up to a 10% stake in the company. S&P 500 futures unbothered by the 6th day of the government shutdown, rallying every day since. Gold surged to an all-time high above $3,970 per ounce, boosted by growing expectations of a Federal Reserve rate cut this month, as well as economic and political uncertainty in the U.S., France and Japan. Oil prices rose more than 1% after OPEC+’s planned production increase for November was more modest than expected, tempering some concerns about supply additions. Crypto assets are also strong with Bitcoin making new all-time highs this weekend. Risk assets continue to rise while defensive sectors remain weak. Brazil’s Lula and Donald Trump spoke Monday, their first major call since the US imposed 50% tariffs, but broader macro tariff headlines very quiet. Big moves in foreign markets overnight as Japan’s Nikkei surged 4.75% on political headlines. More of the same as markets led by technology (XLK) which is now the best sector in the S&P YTD (+23.75%) with Communications (XLC) next best at +19.4% YTD and utilities (XLU), led by nuclear names +18.25% YTD.

• In Industrials: Wells Fargo is tactically constructive on PH, JCI, ALLE, HUBB, MMM in Q3 preview, sees lack of positive surprises as relative performance overhangs for EMR, HON, and IR and downgraded EMR to Equal Weight from OW and LII to Underweight from EW saying the near-term lacks catalysts w/ downsized F25 exit rate growth, tough 1H26 margin comps, & relative valuation expansion that likely needs earnings revision help. LII relative valuation has seen more pressure than Wells anticipated.
• In Rare Earth/Materials: CRML shares surge after Reuters reports Trump administration officials have discussed taking a stake in in the metal mining company. If completed, the deal would give the U.S. government a direct interest in Greenland’s largest, rare earths project. DFLI shares fell after announces 20M shares at $1.25, about 34% discount to stock’s last close saying the Co intends to use net proceeds for working capital and general purposes. Jefferies updated its global mining price deck and up its copper price assumption by c5% to US$5/lb. for 2026 and to US$4.5/lb. (from US$4.25/lb.) LT to reflect a tightening market, but in contrast, sees downside risk for lithium prices and downgraded SQM to Hold.

• AMD +29%; shares surge after saying it will supply artificial intelligence chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10% of the chipmaker.
• CMA +15%; as FITB will acquire CMA in an all-stock transaction valued at $10.9B. Under the terms of the agreement, Comerica’s stockholders will receive 1.8663 Fifth Third shares for each Comerica share, representing $82.88 per share as of Fifth Third’s closing stock price on October 3, 2025.
• CRML +65%; shares surge after Reuters reports Trump administration officials have discussed taking a stake in in the metal mining company. If completed, the deal would give the U.S. government a direct interest in Greenland’s largest, rare earths project.
• FLY +11%; after saying it will acquire national security technology company SciTec for about $855 million, the company said on Sunday, sending shares higher. The deal will be funded through a combination of $300 million in cash and $555 million in Firefly shares.
• HSII +19%; said it agreed to sell itself for $1.3 billion to a consortium of investors led by Advent International and Corvex Private Equity as Heidrick shareholders will receive $59 a share in cash.
• MBLY +3%; was upgraded to Buy from Hold at Deutsche Bank with a $19 price target as part of a Q3 earnings preview as believes Mobileye can beat its Q3 outlook and raised its full year guidance.
• MU +2%; was upgraded to Overweight from Equal Weight at Morgan Stanley and raise tgt to $220 from $160 saying the chip maker will see multiple quarters of double-digit price increases, which can drive substantially higher earnings power.
• SANM +21%; shares surged on the AMD/OpenAI news as Bank America noted under this deal, OpenAI committed to purchase 6 gigawatts worth of AMD’s chips, staring with the MI450 chip next year. They view this announcement as overall positive for Sanmina, as it shows that AMD’s chips are gaining traction in the market. Sanmina is AMD’s “preferred” NPI partner.
• SPRB +365%; after saying the FDA granted Breakthrough Therapy Designation (BTD) to tralesinidase alfa enzyme replacement therapy (TA-ERT) for the treatment of Sanfilippo Syndrome Type B.
• TSLA +3%; after teasing an October 7 event; in a nine-second video posted on social media platform X, the Elon Musk-led automaker showed a vehicle with its headlights illuminated in a dark setting. The company hinted at an event scheduled for Tuesday in a separate video that had “10/7” at the end.

• DFLI -24%; after announces 20M shares at $1.25, about 34% discount to stock’s last close saying the Co intends to use net proceeds for working capital and general purposes, including repayment of $4M under term loan agreement, and investments in next-gen battery technologies.
• META -2%; falling for the 7^th time in last 8 days as shares remain weak after Tae Kim negative call from Barron’s and threat from Sora last week.
• QUBT -11%; announces a $750M private placement with institutional investors. Proceeds will fund commercialization, acquisitions, and scaling production. Closing expected Oct 8, bringing cash to approx. $1.55B.
• SKYE -54%; after Nimacimab monotherapy did not meet its primary endpoint for weight loss; preliminary pharmacokinetic analysis showed lower than expected drug exposure, potentially indicating the need for higher dosing as a monotherapy